How to Find the Best Credit Card for You
Responsible use of a credit card can bring lots of value to your life. You can build a good credit score, which can help with future large purchases such as a car or a house. You can also use a credit card to earn rewards to redeem for things like travel or cash back. However, it can be difficult to sift through the thousands of credit cards available out there to find the one that works best for you and your personal circumstances.
Here’s how to find the best credit card for you:
1. Check your credit score. Your credit score is the single largest determining factor in whether or not a company will approve you for a credit card. You don’t want to blindly apply for a credit card without knowing your own credit score or the minimum required credit score for that card. If you apply and are denied, that can negatively affect your credit score for a time, making it even harder to get the card you want. Make sure not to do this before making any large purchases, as you want to keep your credit score as high as possible.
Check out one of the many free online credit score services. These services not only tell you what your credit score is, they also tell you how that score is determined and any ways you might be able to improve it. Be careful when selecting a service to make sure it’s legitimate, especially before you give them sensitive information.
Once you know your credit score, find credit cards that match that score. The higher your score, the more options you’ll have. However, there are still options for people with low or no credit scores, you just have to search harder.
2. Consider your spending habits. Do you intend to carry a balance on the card, or pay it off in full every month? How often will you use the card, and for how much money? These are all questions to consider when looking at credit cards.
If you’re planning on carrying a balance, get a card with a low APR so you’re not drowning in interest. If you only use the card for emergencies, make sure it has no annual fee so you’re not paying for it to sit dormant.
3. Find rewards you’ll actually use. Many credit cards offer some kind of reward based on the dollar amount you spend. Travel rewards, such as airline miles and hotel points, are common ones. You’ll also find lots of cash back deals. Some are cash back for specific things, like groceries or gas, and some offer general cash back for any purchase.
When comparing cards, go with one that offers cash back that you’ll actually use. If you don’t travel much, then airline miles or hotel points probably won’t be too useful for you. But, if you buy a lot of groceries, cash back at the grocery store could bring lots of valuable rewards.
4. Look at the overall value of the card. Pay attention to the fees and interest associated with the card. If the annual fee or interest rate is too high, it might cancel out any rewards you receive. There also may be additional value beyond rewards, such as sign-up bonuses.
If you’re trying to build your credit, make sure the card will actually help you do just that. Check that you have the opportunity to upgrade your card in the future when your credit score gets better. Consider these things in relation to the rewards you’ll get and how often you plan on using the card.